Wonkbook: Senate Republicans filibuster state aid

By Dylan MatthewsOctober 21, 2011

Ezra is on vacation until November 7th.

Top stories

1) The Senate blocked the shrunk-down jobs bill, reports Rosalind Helderman: "Nine days after President Obama’s $447 billion jobs packagewas blocked in the U.S. Senate, one of the plan’s key components -- which would provide $35 billion to states and local governments to hire teachers and first responders -- suffered the same fate late Thursday. The vote represented the legislative part of a strategy by Democrats to convince voters that they are pushing popular job-creation bills that are being thwarted by Republican opposition. All 47 Republicans voted against allowing the bill to proceed to a full debate, arguing that temporary stimulus dollars for state and local government would do little to bolster the private sector...Two Democrats also opposed proceeding with the measure, as did Sen. Joseph I. Lieberman (I-Conn.); 50 senators voted to move ahead with the bill."

Senate Majority Leader Harry Reid of Nevada speaks during a news conference to urging the passage of the Teachers and First Responders Back to Work Act, Oct. 19, 2011, on Capitol Hill in Washington. (Haraz N. Ghanbari/AP)

3) John Bryson has been confirmed as Commerce Secretary, report Josiah Ryan and Andrew Restuccia: "The Senate late Thursday evening voted to confirm controversial Obama nominee John Bryson to lead Department of Commerce. Several Republicans expressed their opposition to the confirmation in a tepid floor debate that was scheduled for four hours but lasted for less than two. The major complaint against Bryson revolved around his support for cap-and-trade legislation and his role in founding a major environmental group in the 1970s. Sen. James Inhofe (R-Okla.), who delayed the vote back in the summer, lead the quiet opposition arguing that Bryson’s rule, would result in higher energy prices and economy-crushing regulations...Several Democrats as well as Sen. Kay Bailey Hutchison (R-Texas), however, praised Bryson."

4) Unions are helping Occupy Wall Street get organized, reports Peter Wallsten: "The Occupy Wall Street protests that began as a nebulous mix of social and economic grievances are becoming more politically organized -- with help from some of the country’s largest labor unions. Labor groups are mobilizing to provide office space, meeting rooms, photocopying services, legal help, food and other necessities to the protesters. The support is lending some institutional heft to a movement that has prided itself on its freewheeling, non-institutional character. And in return, Occupy activists are pitching in to help unions ratchet up action against several New York firms involved in labor disputes with workers. In one case, Occupy activists have helped union workers disrupt the rarified environs of Sotheby’s art auction house, which is engaged in a contract dispute with about 40 of its art handlers."

5) Congressional leaders want the supercommittee to hurry up, reports Janet Hook: "Senate and House leaders are becoming more directly involved with the supercommittee responsible for delivering a sizable deficit-reduction plan by Thanksgiving, amid growing concern the panel's members could be deadlocked. Senate Majority Leader Harry Reid (D., Nev.) has been meeting more frequently with Democratic members of the 12-member supercommittee, an aide said. Last week, talks began between top aides to Mr. Reid and House Speaker John Boehner (R., Ohio). The panel has until Nov. 23 to get at least seven votes for a plan to reduce the deficit over the next decade by at least $1.2 trillion--a challenge that revives familiar fault lines between the parties, with Republicans opposing any tax-revenue increase that Democrats say must be part of any package."

Top op-eds

1) The economy really is getting better, writes Annie Lowrey: "The good news comes in construction. This month, housing starts smashed expectations, jumping 15 percent. The biggest boost comes from the building of multifamily units, like apartment buildings. The pace of single-family home building is improving, too, increasing year-on-year and reversing a downward trend this month...Second, consumers. They aren’t confident, to be sure. A Thomson Reuters and University of Michigan poll of consumer sentiment released last week found that consumers’ 'expectations of the future' are at the lowest point in three decades--lower than during the depths of the financial crisis and the period after Sept. 11. Still, all that gloom has not stopped people from hitting the mall."

2) The GOP jobs plan isn't serious, writes Paul Krugman: "Both Rick Perry and Mitt Romney have, however, put weakened environmental protection at the core of their economic proposals, as have Senate Republicans. Mr. Perry has put out a specific number -- 1.2 million jobs -- that appears to be based on a study released by the American Petroleum Institute, a trade association, claiming favorable employment effects from removing restrictions on oil and gas extraction...All the big numbers in the report are projections for late this decade. The report predicts fewer than 200,000 jobs next year, and fewer than 700,000 even by 2015. You might want to compare these numbers with a couple of other numbers: the 14 million Americans currently unemployed, and the one million to two million jobs that independent estimates suggest the Obama plan would create, not in the distant future, but in 2012."

3) The supercommittee must use a current law baseline, writes David Walker: "The supercommittee could choose from two primary bases to keep score. The first is the Congressional Budget Office’s extended baseline, or the current-law baseline. This assumes that the Bush tax cuts will expire at the end of calendar 2012; the alternative minimum tax will not be addressed and physician reimbursements under Medicare will be cut dramatically. The other is the CBO’s alternative baseline, or the current-policy baseline -- which assumes that most of the Bush tax cuts will be extended; the alternative minimum tax will be patched and physician payments will not be cut dramatically...Simply put, our combined fiscal reforms must result in more progress than would occur if Congress and the president took a 10-year vacation!"

4) Republicans don't have a jobs plan, writes Gene Sperling: "What is most surprising and disturbing is that Republicans have thus far made no serious attempt to put forward a strategy that would ensure that growth is strong enough over the next 12 to 18 months to start bringing the unemployment rate down. Some of our Republican friends protest this depiction because they've repackaged a variety of long-term measures and stuck a 'jobs plan' label on them...They are not designed to create jobs in the immediate term or to address the current crisis of long-term unemployment. In fact, Gus Faucher, the director of macroeconomics at Moody's Analytics, after reviewing the latest Republican jobs plan (the Jobs Through Growth Act), told the Washington Post that it would do nothing to create jobs in the short-term and could even make matters worse."

Still to come: Banks may have to pay still more to bailout Greece; the administration is revising its rules for provider-based health groups; No Child Left Behind reform is moving forward in the Senate; California's greenhouse gas regulations are taking effect; and a cat takes home the groceries.

Economy

The Greek bailout could end up costing banks still more, report Howard Schneider and Michael Birnbaum: "Private investors in Greek bonds would need to accept losses of at least 50 percent to stabilize Greece’s finances, according to a joint European and International Monetary Fund analysis that has put bankers and politicians at loggerheads over how to bail out the country once and for all. The contribution is more than double what a banking industry group agreed to over the summer. But Greece’s cratering economy and public opposition to more taxpayer-supported loans is putting pressure on private investors to fund a growing gap in the country’s rescue program...No other issue rubs as raw a financial nerve as the divvying of responsibility for more than $300 billion in bonds, bonds that Greece -- it is now almost universally acknowledged -- cannot repay."

The mortgage deal could now include billions in refinancing aid, reports Shahien Nasiripour: "US state and federal officials plan to give the country’s largest mortgage servicers wider protection against legal claims in exchange for refinancing help for existing borrowers, as talks on a $25bn settlement of alleged foreclosure improprieties advance...Under the proposed deal, the banks would pay billions of dollars into a federal programme that would reduce debt levels and mortgage payments for troubled borrowers. It would also fund other schemes, such as distressed home sales in which outstanding debts are largely forgiven, payment forbearance for unemployed borrowers, the tearing down of dilapidated and vacant homes and transition assistance for homeowners to move into rented accommodations, people familiar with the matter said."

Flat tax proposals are politically treacherous, reports Jia Lynn Yang: "With Herman Cain and now Texas Gov. Rick Perry touting a single rate for all taxpayers, the flat tax is enjoying a moment in the political spotlight not seen since the 1990s. But history shows that those who propose the flat tax while running for president -- a group that includes publisher Steve Forbes, Sen. Phil Gramm (R-Tex.) and California Gov. Jerry Brown (D) -- tend to flame out. The flat tax is appealing at first to voters for its simplicity, but the very thing that makes it popular also makes it politically treacherous. The allure of the flat tax is that it promises to wipe clean the complicated tax code. But it does this by throwing out some popular tax deductions, including breaks for mortgage interest payments, charitable giving and employer-paid health care."

There was a time we actually worried about running out of debt, reports David Kestenbaum: "Planet Money has obtained a secret government report outlining what once looked like a potential crisis: The possibility that the U.S. government might pay off its entire debt. It sounds ridiculous today. But not so long ago, the prospect of a debt-free U.S. was seen as a real possibility with the potential to upset the global financial system. We recently obtained the report through a Freedom of Information Act Request. You can read the whole thing here. (It's a PDF.) The report is called 'Life After Debt'. It was written in the year 2000, when the U.S. was running a budget surplus, taking in more than it was spending every year. Economists were projecting that the entire national debt could be paid off by 2012."

Senators who opposed the scaled-back jobs bill cost their constituents milions, writes Greg Sargent: "Nebraska, home to Senator Ben Nelson: The aid proposal would provide $176 million to the state, with the goal of supporting up to 2,800 education jobs -- impacting untold thousands more people, the economy, and the state’s future. The 0.5 percent millionaire surtax would impact 0.1 percent of Nebraska taxpayers...Maine, home to senators Olympia Snowe and Susan Collins: The aid proposal would provide over $117 million to the state, with the goal of supporting up to 1,800 education jobs -- impacting untold thousands more people, the economy, and the state’s future. The 0.5 percent millionaire surtax would impact 0.1 percent of Maine taxpayers, or roughly 375 people."

The administration is revising ACO rules, reports N.C. Aizenman: "The Obama administration on Thursday substantially revised the rules of a program under the 2010 health-care law aimed at encouraging doctors and hospitals to coordinate care. The final regulations grant medical providers far more flexibility than a draft proposal released in March. The move was greeted with jubilation by groups representing doctors and hospitals. But organizations for insurers and employers complained that the administration’s concessions increased the likelihood that providers will consolidate, reducing competition and driving up prices. The program directs Medicare to offer financial incentives for medical providers to band together in 'accountable care organizations,' or ACOs."

The Justice Department wants the Supreme Court to go all-or-nothing on health reform, reports Sam Baker: "The Justice Department argued this week that if the Supreme Court strikes down the healthcare law’s individual mandate, it also has to ax two popular provisions of the law. Courts have reached differing conclusions on the question of 'severability' -- whether finding the mandate unconstitutional requires striking down the rest of the law. The lower court in the case now before the Supreme Court said the mandate could be struck down on its own, without affecting other parts of the healthcare law. But the Justice Department said in a Supreme Court brief...the court would also have invalidate policies that require insurers cover people with pre-existing conditions and prohibit them from charging those people higher premiums."

Domestic Policy

No Child Left Behind reform is moving ahead, reports Lyndsey Layton: "A Senate panel voted 15 to 7 Thursday to reduce the role of the federal government in overseeing the nation’s 100,000 public schools as part of a revamping of No Child Left Behind, the key education law. The government would stop supervising the performance of 95 percent of the nation’s schools under a bipartisan bill crafted by Sen. Tom Harkin (D-Iowa), chairman of the Health, Education, Labor and Pensions Committee, and the ranking Republican, Sen. Mike Enzi of Wyoming. Only 5 percent of a state’s worst-performing schools -- often known as 'dropout factories' -- would be subject to federal oversight under the measure...The legislation would drop requirements that all public schools meet yearly achievement goals or face federal sanctions."

White House advisor Melody Barnes is leaving, reports Mike Allen: "Melody Barnes, President Barack Obama’s domestic policy adviser, said Thursday she is leaving the White House at the end of the year to spend more time with her family and consider opportunities in the private sector. Barnes, a lawyer who was also the top domestic policy adviser on Obama’s 2008 campaign, juggled sensitive issues ranging from health care to education to immigration to nutrition. Prior to joining the campaign, she was the executive vice president for policy at the Center for American Progress. From 1995 to 2003, she served as chief counsel to Sen. Edward M. Kennedy on the Senate Judiciary Committee. Her departure -- first reported by POLITICO - took colleagues by surprise."

A federally-backed report is recommending new nutritional labeling rules, reports Dina ElBoghdady: "A symbol, such as a check mark or a star, should be displayed on the front of every food item and beverage sold in grocery stores so harried shoppers can judge nutritional value at a glance, according to a government-sponsored report released Thursday. In the report, a panel of experts from the Institute of Medicine told federal regulators that the epidemic of diet-related chronic diseases warrants a single rating system to help consumers sort through nutritional information. The panel devised a labeling plan intended to be simple enough for kids to use. But it’s unclear what regulators will do. The food and beverage industry, which launched its own labeling initiative this year, immediately resisted the plan."

Millions mistakenly claimed a stimulus tax credit, reports Ed O'Keefe: "Millions of American taxpayers may have erroneously claimed an education tax credit last year that was designed to provide relief as part of the Obama administration’s economic stimulus program, according to a new federal watchdog report disputed by the Internal Revenue Service. As many as 2.1 million taxpayers may have erroneously claimed a total of $3.2 billion by taking advantage of the American Opportunity Tax Credit, which provides up to $2,500 in relief for a college student paying tuition and related expenses. The tax credit, once known as the Hope Scholarship Credit, was expanded as part of the 2009 economic stimulus program. According to a report by the Treasury Inspector General for Tax Administration released Thursday, 1.7 million taxpayers received $2.6 billion in education credits that appear to be erroneous based on IRS records."

California's moving ahead with greenhouse regulations, reports Felicity Barringer: "Fifteen months after a similar effort died in Congress, California regulators adopted a system on Thursday for combating climate change that sets limits on greenhouse gas emissions and creates market incentives to encourage oil refineries, electricity generators and other polluters to clean up their plants. The eight members of the Air Resources Board who were present gave a unanimous vote of approval. 'We are charting new ground here,' said Lydia H. Kennard, a board member, just before the vote. 'The country and the world are watching.' The plan will take effect in 2013. The board members seemed keenly aware that they were giving the state a policy prescription regarded as poison in some parts of the country."

Closing credits: Wonkbook is compiled and produced with help from Dylan Matthews and Michelle Williams.